Thank You For Choosing CBIA Insurance

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1 8001 Canoga Ave, Suite A Canoga Park, California Industrial Ave, Suite 160 Roseville, California I Thank You For Choosing CBIA Insurance Dear CBIA Client, Thank you for choosing CBIA for your insurance needs. One of our goals is to not only provide you with the insurance you need to run your business but also provide educational information. This not only helps you keep your business running smoothly but helps to make sure you receive the maximum benefit from your policies. We would like to make sure you have access to resources and services that are available as a courtesy to our clients. In this welcome packet you will receive information that will help you understand your policy, benefits and additional services, we will also provide you with contact information to our knowledgeable staff members should you have any questions during the term of your policy. Thank you again for allowing us to assist you with all of your commercial insurance needs. Best Regards, Mark Chandler MC President CBIA Insurance Agency, Inc Canoga Ave, Suite A Canoga Park, California

2 The Initial Inspection Many insurance companies will conduct an inspection upon issuing a policy. This could be in person but often it is by phone. The inspector will ask basic questions looking for discrepancies from the application and any activities that could be outside the scope of the coverage. They often ask about employee payroll as that is how many policy premiums are rated. We would recommend when speaking to the inspector you have the application handy to refer to in order to avoid unnecessary discrepancies. They will likely ask about your subcontractor agreements, if applicable. Keep in mind these inspectors are often subcontracted by the carriers and are not experts in the construction field, so try to avoid jargon that could confuse them or misunderstand what you are saying. Subcontractor Agreements When using a subcontractor most carriers will require you to have a written agreement with wording to protect you and the carrier in the event of a problem or claim with the subcontractor s work. By not having these agreements in place you could run into problems with your carrier and they could cancel the policy or charge significant additional premiums. You also want to obtain a copy of the subcontractors insurance certificate and request to be named on their policy as an additional insured, in the event a claim is filed as a result of negligence on the side of the sub. We have attached a sample Subcontractor agreement (this is the short-form version) as an example. There are many different ones out there and you should use the one that best meets your needs. One thing some carriers want to know is if your agreement has a Hold-Harmless Clause or Indemnification Clause it in. You should check to see if your agreement has this in it. This is a clause that helps protect you in case of a subcontractor s faulty work or liability. Contracts & Education Builders Bookstore: 2

3 Certificate of Insurance A Certificate of Insurance is a document issued by our office that lists your name and some information about your carrier and policy limits. It also states the nature of the work you are performing and the name of the person who is requesting the certificate from you, known as the Certificate Holder. The certificate shows that you have a policy in effect as of the date of issuance. It offers no additional protection or rights to the certificate holder. Additional Insured Your insurance carrier requires you to add your name to your subcontractors policy as an Additional Insured and get the written certificate and endorsement from the carrier. This helps protect you under the subs policy should a problem arise for the work he is doing for you. Often the subcontractor agreement will have some wording stating they must add your company as an Additional Insured. This is a pretty simple process and once you ve done it a few times you ll find it s a natural part of doing business. Working within the policy limits As you may have discovered in getting your insurance through us, is that each carrier has its own limits of the work they will and will not allow. You were probably asked a number of questions by your agent to get a good idea of the work you will be doing during the policy period to make sure you fit the policy guidelines. So long as you are staying within the scope of work you stated on the application you should be fine. If you are going to be building a new house, work on retaining walls or other things beyond what you initially thought you would be doing, give us a call. We can check and see if this work is acceptable to your carrier or if it makes financial sense, we can put you in a program that will allow it. If you have a claim down the road from work that is not allowed by the carrier you could find that your policy is no longer in force nor the work covered. We hope this brief letter has given you some useful information when it comes to running and protecting your business. We are very glad you have chosen us for your insurance needs and are committed to providing you excellent service. If you have any questions or suggestions please contact your agent. 3

4 Are you Putting Yourself at Risk? Liability Insurance Protects your Company from Lawsuits Liability insurance is for more than just ensuring that your company is in compliance with local laws and regulations. Sure, being insured will help you win more contracts, and it will give you the peace of mind that your employees are covered in case they are injured on the job but liability insurance can also keep your company from being exposed to massive fines and lawsuits should something go wrong. The average construction-site incident in 2013 involved more than $1 million in medical and legal bills, and significantly impacted the operations of the company involved. Could your company survive millions of dollars in legal expenses that arise from a liability issue? With liability insurance, you don t have to constantly worry that a small accident will snowball into a major disaster that can put you out of business. What happens if there is an Accident? Imagine, for example, that you are doing a small satellite-dish installation job when one of your employees falls off the roof and is seriously injured. In the subsequent months, the employee in question has to go through thousands upon thousands of dollars in immediate medical care and rehab and their insurance company will look to your liability insurance to reimburse them for their medical expenses. If your company is not appropriately insured, you might be held personally liable for your employees injuries (especially if you misrepresented their insurance status) or your company could be sued and taken to court over the full amount of the medical bills along with legal bills and fines. 4

5 On the other hand, if your company has liability insurance, your liability insurance will protect your company in the event of an accident or injury to your or an employee. Liability insurance also covers your company if there is damage to the property that you are working on a common occurrence when working on older homes where the plumbing and structural systems might not be documented properly or in very good condition. Even if you do everything by the book, and you are as safe as you can be, something might go wrong. Criminal Penalties for Uninsured Contractors Being uninsured is more than just bad business, it can be a criminal offense! In November of 2014, the City of San Diego cracked down on unlicensed contractors by arresting more than 100 people that responded to ads looking for licensed contractor work. Many of the contractors had criminal histories, and all were fined heavily and given misdemeanors for attempting to contract on jobs over $500 without a contracting license. For property owners, the penalties of hiring people without liability insurance can be serious. Homeowner s insurance usually won t cover contractors that are operating illegally, so the homeowner could find themselves being dragged to court if there is an accident 5

6 Also, there is little or no recourse that the homeowner has if their property is damaged by the uninsured contractor and they can t have their additions or renovations approved and permitted. While unlicensed and uninsured contractors might seem cheaper at first, since they are able to bid extremely low prices as a result of having lower expenses and not having to maintain a valid license, they are actually very expensive in the long run because they could create a legal and financial disaster for the homeowner if something goes wrong. General Liability Helps Win Contracts If you don t have liability insurance, potential clients will turn down your proposals because they don t want to expose themselves to the risk that they would be taking on by hiring an unlicensed contractor to do work for them. Having general liability insurance does more than provide a safety net for your company, it also makes it possible for you to bid on a wider range of jobs and ultimately develop your business into a more competitive contractor agency. When you start working on a project, your insurance carrier will provide you with a certificate of insurance that you can show your clients to assure them that you are covered completely in the event of an incident. Make sure that your insurance company has a way to get in touch with them to receive these certificates quickly since you might end up in breach of a contract if you are unable to supply the client with your certificate at the beginning of the contract. Most of the time, general contractors will limit access to their job sites unless everyone is able to display their certificates of general liability insurance upon arrival. 6

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